Gold has always been considered a valuable commodity in our country. Not only does it hold a lot of sentiment and emotional value, but it also doubles up as a powerful investment option. So it just makes sense that gold is one of the most popular loan collateral options available in India. Wondering what advantages can taking a loan against your gold offer you? Let’s find out.
Maximum Gold Loan Per Gram
One of the most significant advantages of taking a loan against gold is the high loan-to-value (LTV) ratio that lenders offer. Most banks and NBFCs, such as Muthoot Finance, offer as much as 75% of the gold’s value as the loan amount. In some cases, you may even be able to get a maximum gold loan per gram you own. This means that the more gold you possess, the higher the loan amount you can get. This flexibility makes gold loans a popular option for people looking for quick cash.
Another advantage of taking a loan against gold is that the loan processing is relatively quick. For example, gold loans from Muthoot Finance can be disbursed within an hour. This is because lenders don’t need to evaluate your credit history or financial status; they only need to assess the value of your gold. This means that gold loans are ideal for anyone who needs money urgently and cannot wait for a lengthy loan disbursal process.
Gold Loan Advantages
Apart from the high LTV ratio and quick processing, there are several advantages to taking a loan against gold. One of the biggest benefits is the fact that you do not need to give up ownership of your gold. In other words, you can continue to hold on to the gold even after you have taken a loan against it. This means that gold loans can act as a bridge for people who need cash but do not want to sell their gold furniture or ornaments.
Another advantage of taking a loan against gold is that the interest rates are generally lower than other loan options. Since the loan is secured against the gold, lenders view it as a low-risk option. This means that they may be willing to offer you a lower interest rate than unsecured loans. For instance, Muthoot Finance’s gold loans start at just 7.15% per annum, which is much lower than personal loans or credit card interest rates.
Gold loans are also suitable for anyone who is looking to improve their credit score. Since the loan is secured against the gold, there is no need to run a credit check. This means that even if you have a poor credit history, you can still get a loan against your gold. It also gives you a chance to improve your credit score by making timely repayments. By doing so, you will be building a positive credit history, which can help you get better loan deals in the future.
Another gold loan advantage is the flexibility it offers. You can use the loan amount for any purpose you want. Unlike other loans, there is no restriction on how you can utilize the loan amount. This means that you can use the money to fund your child’s education, invest in a business or pay off other debts.
Conclusion
In conclusion, taking a loan against gold has several advantages. The high loan-to-value ratio, quick processing, and low-interest rates make it an attractive option for anyone looking for quick cash. Additionally, the fact that you don’t need to give up ownership of your gold makes it an excellent option for anyone who wants to keep their gold safe. Gold loans also offer flexibility in terms of how you can utilize the loan amount, making it suitable for a variety of purposes. So if you have gold furniture or ornaments lying around, consider taking a gold loan and putting that gold to good use!
